Time, Inc. v. U.S. Postal Service
| Decision Date | 08 June 1983 |
| Docket Number | D,Nos. 893-897,s. 893-897 |
| Citation | 710 F.2d 34 |
| Parties | TIME, INCORPORATED; Newsweek, Inc.; The Reuben H. Donnelley Corporation; Mail Advertising Service Association International; Direct Mail/Marketing Association, Inc.; Mail Order Association of America; National Association of Greeting Card Publishers; American Business Press, Inc.; Associated Third Class Mail Users; American Retail Federation; Council of Public Utility Mailers; United Parcel Service of America, Inc., Petitioners, v. UNITED STATES POSTAL SERVICE, Respondent, Direct Mail/Marketing Association, Inc.; Dow Jones & Company; The National Association of Greeting Card Publishers; Association of American Publishers; The Recording Industry Association of America, Inc.; United Parcel Service of America, Inc.; American Newspaper Publishers Association; Advertisers Distribution Services; Advertisers Postal Service Corp.; Magazine Publishers Association; Classroom Publishers Association; March of Dimes Birth Defects Foundation; National Newspaper Association; Mail Order Association of America; Parcel Shippers Association; Time, Incorporated; Newsweek, Inc.; Council of Public Utility Mailers; American Retail Federation; American Bankers Association, Intervenors. ockets 81-4183, 81-4185, 81-4203, 81-4205 and 81-6216. |
| Court | U.S. Court of Appeals — Second Circuit |
David C. Todd, Patton, Boggs & Blow, Washington, D.C., submitted brief, for petitioner Mail Order Ass'n of America.
Eugene E. Threadgill, Connole & O'Connell, Washington, D.C., submitted brief, for petitioners American Retail Federation and Council of Public Utility Mailers.
George P. Williams, III, Robert L. Kendall, Jr., John E. McKeever, Margaret S. Woodruff, Schnader, Harrison, Segal & Lewis, Philadelphia, Pa., submitted brief for petitioner United Parcel Service of America, Inc.
Louis A. Cox, Gen. Counsel, Daniel J. Foucheaux, Jr., Asst. Gen. Counsel, Leslie A. Clark, Richard T. Cooper, Eric P. Koetting, Scott L. Reiter, U.S. Postal Service, Washington, D.C. (Joseph A. Califano, Jr., Dewey, Ballantine, Bushby, Palmer & Wood, Washington, D.C., of counsel), submitted brief, for respondent U.S. Postal Service.
John M. Burzio, Thomas W. McLaughlin, Hydeman, Mason, Burzio & Lloyd, Washington, D.C., Charles M. Waygood, Olwine, Connelly, Chase O'Donnell & Wehyer, New York City, submitted brief, for intervenor Time, Inc.
Toni K. Allen, Susan D. Sawtelle, Wald, Harkrader & Ross, Washington, D.C. (Diana M. Daniels, Newsweek, Inc., New York City, of counsel), submitted brief, for intervenor Newsweek, Inc.
Dana T. Ackerly, David L. Harfst, Covington & Burling, Washington, D.C., Robert L. Sherman, New York City, submitted brief, for intervenor Direct Mail/Marketing Ass'n, Inc.
David Minton, Loomis, Owen, Fellman & Howe, Washington, D.C., submitted brief, for intervenor Magazine Publishers Ass'n.
David F. Stover, Stephen L. Sharfman, Shelley S. Dreifuss, Washington, D.C., Postal Rate Com'n, submitted brief, for Postal Rate Com'n as amicus curiae.
Before LUMBARD, MESKILL and KEARSE, * Circuit Judges.
This decision should bring to an end a major portion of the fifth general ratemaking proceeding under the Postal Reorganization Act of 1970, 39 U.S.C. Secs. 101 et seq. (Act), a proceeding which has spawned two lengthy decisions by this Court, see Time, Inc. v. United States Postal Service, 685 F.2d 760 (2d Cir.1982); Newsweek, Inc. v. United States Postal Service, 663 F.2d 1186 (2d Cir.1981), cert. granted sub nom., National Association of Greeting Card Publishers v. United States Postal Service, 456 U.S. 925, 102 S.Ct. 1969, 72 L.Ed.2d 439 (1982), argued, 51 U.S.L.W. 3440 (U.S. Dec. 1, 1982), and which has exposed the tensions that exist between the two executive agencies charged with administering the postal system: the United States Postal Service and its Board of Governors (Board) and the Postal Rate Commission (PRC). We are now asked to complete our review, begun in Time, of the Board's Modification Decision 1 which substantially revised the schedule of rates and fees for postal services that had been propounded by the PRC in its Third Recommended Decision. 2
We held in Time that the Board acted within its powers under 39 U.S.C. Sec. 3625(d) (1976) when it modified the PRC's recommended rates for postal services in order to restore the almost $1 billion in revenues that the PRC had unlawfully trimmed from the Postal Service's estimated revenue requirements. Time, 685 F.2d at 767; see Newsweek, 663 F.2d at 1204-06. However, we remanded the case to the Board and retained jurisdiction because it had failed to provide class by class explanations of its modifications and had failed to justify its rejection of a cost methodology employed by the PRC in formulating certain rates. Time, 685 F.2d at 773-74. We gave the Board the option on remand of either returning to the PRC for a fourth recommended decision in light of Newsweek and Time, or providing us with an explanation and justification of its modifications. Id. at 775. The Board opted for the latter course and on December 20, 1982 produced for our review its Further Explanation and Justification Supporting the September 29, 1981 Decision of the Governors of the United States Postal Service on Rates of Postage and Fees for Postal Services (Dec. 20, 1982), Supp.App. (Further Explanation ). Our review is now limited to whether the Further Explanation of the Board adequately explains, based on substantial record evidence, the modifications made to the PRC's Third Recommended Decision. 3 39 U.S.C. Sec. 3628 (1976); 5 U.S.C. Sec. 706 (1976). For purposes of this opinion, we assume familiarity with Newsweek and Time. We will, however, begin with a brief description of the ratemaking process and a synopsis of our prior decisions in Newsweek and Time.
Congress has created a unique legislative scheme that divides postal ratemaking authority between two independent executive agencies. See 39 U.S.C. Secs. 201-02, 3601 (1976). The Postal Reorganization Act of 1970 vests authority in the Board "to establish reasonable and equitable classes of mail and reasonable and equitable rates of postage and fees" provided that such rates and fees generate "sufficient revenues so that the total estimated income and appropriations to the Postal Service will equal as nearly as practicable total estimated costs Thus, the Board is the business manager of the Postal Service, in day-to-day control of policymaking and operations. It is responsible for determining revenue requirements based upon total estimated costs--fixed institutional costs and variable costs tied to volume, see 39 U.S.C. Sec. 3621 (1976)--and is empowered to initiate a rate proceeding when revenue needs warrant rate increases, 39 U.S.C. Sec. 3622(a) (1976). Whereas the Board is in charge of management, the PRC controls ratemaking. It is responsible for establishing postal rates, fees and classifications. 39 U.S.C. Sec. 3622 (1976). Its primary responsibility in a rate proceeding is to allocate to each class of mail the direct and indirect costs attributable to that class in accordance with the congressional mandate that "each class of mail or type of mail service [shall] bear the direct and indirect postal costs attributable to that class or type plus that portion of all other costs of the Postal Service reasonably assignable to such class or type." 39 U.S.C. Sec. 3622(b)(3) (1976). Because institutional costs are not directly attributable to individual classes of service, they have been allocated through the pricing process in accordance with the policies defined in 39 U.S.C. Sec. 3622(b) (1976) (except subsection (3)).
of the Postal Service." 39 U.S.C. Sec. 3621 (1976). However, the Board must submit proposed rate changes to the PRC for its approval and evaluation in light of the policies and factors embodied in 39 U.S.C. Sec. 3622(b) (1976). The PRC must afford interested parties an opportunity to comment on proposed rate changes and must return a decision to the Board which recommends rates sufficient to satisfy the Postal Service's estimated revenue requirements. 39 U.S.C. Sec. 3624 (1976); Newsweek, 663 F.2d at 1203-06. The Board may then approve, allow under protest, reject, or modify the recommended decision in accordance with 39 U.S.C. Sec. 3625 (1976)
Because the Board is obligated to ensure that the Postal Service maintains a balanced budget, 39 U.S.C. Sec. 3621 (1976), Congress empowered the Board either to seek judicial review, reject and seek reconsideration, or, in some circumstances, to modify a recommended decision of the PRC. 39 U.S.C. Sec. 3625(a) (1976). The Board cannot modify a recommended decision, however, unless it finds that the recommended rates are inadequate to generate "sufficient total revenues so that total estimated income and appropriations will equal as nearly as practicable estimated total costs," 39 U.S.C. Sec. 3625(d)(2) (1976). In modifying recommended rates, the Board must, like the PRC, respect the policies underlying the Act, 39 U.S.C. Sec. 3625(d)(1) (1976), including the requirement that each class of mail bear its attributable costs and a reasonably assignable portion of all other costs, 39 U.S.C. Sec. 3622(b)(3) (1976).
In Newsweek, we considered the lawfulness of postal rates and fees that had been recommended by the PRC and allowed to take effect under protest by the Board. 4 39 U.S.C. Sec. 3625(c)(2) (1976). We held that the PRC had unlawfully encroached on the management authority of the Board when it trimmed almost $1 billion from the Postal Service's estimated revenue requirements. 663 F.2d at 1205. Shortly before Newsweek was decided, the Board issued its Modification Decision which drastically revised the rates and fees for postal services contained in the PRC's Third Recommended Decision. In Time, we considered the lawfulness of the Board's modifications. We held that the Board...
To continue reading
Request your trial
-
UPS Worldwide Forwarding, Inc. v. U.S. Postal Service, 94-7423
...between the three groups are rationally related to the achievement of the goal. Id. at 142; see also Time, Inc. v. United States Postal Serv., 710 F.2d 34, 41 n. 8 (2d Cir.1983) (holding that the disparities between the contribution to the Postal Service's fixed costs from each class of mai......
-
Direct Marketing Ass'n, Inc. v. U.S. Postal Service, 9
...39 U.S.C. Secs. 101 et seq. (1976) (Act). See Time, Inc. v. United States Postal Service, 685 F.2d 760 (2d Cir.1982), after remand, 710 F.2d 34 (2d Cir.1983); Newsweek, Inc. v. United States Postal Service, 663 F.2d 1186 (2d Cir.1981), aff'd sub nom. National Association of Greeting Card Pu......
-
Barrett v. United States, 76 Civ. 381 (CBM)
......From the time these actions were commenced, defendants have ... 710 F.2d 29 (2d Cir.1983); and Grove Press, Inc. v. Angleton, 649 F.2d 121 (2d Cir. 1981). ...(dismissing action against Missouri Secret Service agent and an Assistant United States Attorney ... Plaintiff in the case before us argues that there is no requirement under Sec. ......
-
Direct Marketing Ass'n, Inc. v. U.S. Postal Service, s. 1219
...and the PRC and specifies the procedures by which the Governors approve postal rates. Time, Inc. v. United States Postal Service, 710 F.2d 34, 36 (2d Cir.1983) [hereinafter cited as Time II ]; see 39 U.S.C. Secs. 201-02, 3601. "While the [Governors are] is entrusted with the power 'to estab......